Net Impact Soap Box

Thursday, October 9, 2008

Open Source as Social Enterprise

In my Social Enterprise Class taught by Jim Schorr on Tuesday, we had a class on Technology in Social Enterprise which featured Mitchell Baker, chair of the Mozilla Foundation. Most of you know Mozilla for producing Firefox and for using an "open source" model for developing its browser software. They were created in the 90s as a response to the monopoly that Microsoft's Internet Explorer had on the browser market and the growing concerns about pop-ups, spyware, and other privacy-invading practices. Their vision is a free internet and their belief is that private companies, without something to check their commercial impulses, will necessarily act in a way that will hurt consumers.

My first reaction to Mozilla is that it is an amazing case study in organizational behavior. They use a distributed system of authority whereby ownership of the product and company rests in the hands of hundreds and thousands of developers, most of whom are volunteers. They are a nonprofit foundation that houses a for-profit entity that generates nearly 80 million in revenue. Going up against giants like Microsoft, Apple, and now Google, Baker said that participation and ownershipby their volunteers and employees is their competitive advantage in the face of a huge resource disadvantage. Product decisions are made in a very collective fashion, and while this creates tradeoffs in terms of time spent on decision-making, Baker said the benefit is that people are extremely bought in (which means easier recruitment of talent, greater retention, and more productivity).

I wonder what other industries or products could work with this open-source model. Knowledge creation (e.g. Wikipedia) for sure, but hard to think of many others products whose development can be split up into such discrete parts and can be coordinated over long distances.

Another reaction I had is that while Mozilla's existence owes itself to the belief that commercialization and profit-seeking will create a less free and vital internet, its success has required business savvy and scale to be a relevant player in the market. Mozilla has to think about diversifying its revenue streams (which mostly come from Google ad revenues from its toolbar), has to think about how to market firefox to the non-digerati without a big marketing budget. Paradoxically, Mozilla's success in achieving its social mission rests on its ability to be a business success.

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